Even China’s population of 1.4 billion would not be enough to fill all the empty apartments littered across the country, a former official said on Saturday, in a rare public critique of the country’s crisis-hit property market.
China’s property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group (3333.HK) defaulted on its debt obligations following a clampdown on new borrowing.
Big-name developers such as Country Garden Holdings (2007.HK) continue to teeter close to default even to this day, keeping home-buyer sentiment depressed.
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.
That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.
This is important, not least because making the cement and steel for these surplus apartments and associated road infrastructure makes an enormous contribution to global CO2 emissions. Look at how the emissions took off after 2005. So the sooner the bubble bursts, the better for the climate.
Then they’ll expend CO2 removing the abandoned structures, and building other things on top of some of that, and another bubble will be coming down the pipe sooner or later.
We need to fix the systems that let these bubbles occur in the first place
I recall a presentation by a key guy in China’s planning system (NDRC-ERI) - it was clear that their plan all along was for the peak construction to coincide with the peak working-age population - which is why they would never concede to reduce emissions earlier. They had a long-term view including demographics (more than most governments consider), but the process got its own momentum and became the bubble - also related to city-government financing incentives as well as risky tycoons. Now the problem with such over-planning is that the next generation may not thank them for the legacy of this type of construction (and CO2), and prefer to live in smaller houses or away from the coast (as Shanghai, Tianjin, etc. will be flooded due to same CO2), hence as you say even more reconstruction (and more CO2). But the peak has passed, what really matters next is whether India will repeat similar mistakes.